Competition and Cognition in the Market for Online News

ABSTRACT

Does it pay to appear unbiased in an attention-based economy where bias sells? We study this question in light of increased consumer partisan polarization and biases alongside greater technology usage and partisanship in journalism. Using a game-theoretic framework that captures the essential properties of the online news market, we show that polarization with biases may constrain neutral and partisan news websites’ engagement-enhancing strategies differently; and online news providers can strategically exploit consumer perceptions to maximize engagement-driven revenues. Our analysis suggests that neutral news outlets depend on polarization imbalance and perceptions of neutrality. Moreover, increased search costs and consumer bias toward partisan outlets can lessen the echo chamber effect in online news consumption. Our work advances discussions on online news neutrality, providing fresh insights into the “marketplace of ideas” view and source versus content neutrality in the face of increasing affective polarization.

KEYWORDS:

• Online news
• societal polarization
• online engagement
• media bias
• cognitive reapportionment

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary Material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07421222.2024.2340824

Notes

1 Refer to Table B.1 in the Online Supplemental Appendix 2 for specific examples of such reapportionment.

2 Online news neutrality [96] implies (1) non-interference, i.e., only transmitting the facts and letting readers decide; (2) non-alignment, i.e., reporting on politics should be impartial to avoid furthering partisan interests.

3 In Online Supplemental Appendix 1, we highlight the neutral/partisan perceptions of some of the most popular neutral and partisan news sources over the past five years.

4 Please see Table B.1 in Online Supplemental Appendix 2 for some examples of how news organizations are reapportioning cognitive journalistic tasks among humans and technology (e.g., NLP and generative AI).

5 We consider duopoly scenarios in Online Supplemental Appendix 12; all results hold.

6 We consider the scenario where aversion dominates affinity in the Online Appendix, and provide implications.

7 In Online Supplemental Appendix 12, we explore an extension that includes center-adjacent (-left or-right) consumers instead of pure centrist consumers.

8 Ad Fontes Media’s reliability rating ranges from 0 64 for fact reporting to analysis, opinion, propaganda, and inaccurate/fabricated material. High scores are for factual and non-partisan reporting.

9 Please see Online Supplemental Appendices 12.1 and 12.2 for further details.

10 See: https://doi.org/10.17605/OSF.IO/UZCA3

Additional information

Notes on contributors

Abhishek Ray

Abhishek Ray ([email protected]; corresponding author) is an Assistant Professor in the Information Systems and Operations Management Area at the Costello College of Business, George Mason University. He holds a Ph.D. in Management Information Systems from Purdue University. Dr. Ray worked in IT consulting for five years before entering academia. His research interests include digital platforms and decentralized social networks, game-theoretic policy concerns in online platforms, and big data computational challenges. He has published in such journals such as Information Systems Research and IISE Transactions, and has co-authored a chapter in the Encyclopedia of Optimization.

Hossein Ghasemkhani

Hossein Ghasemkhani([email protected]) is an Assistant Professor of Management at the Daniels School of Business, Purdue University. He earned his PhD in Business Administration from the Foster School of Business at the University of Washington. Dr. Ghasemkhani’s research centers on the economics of information systems, particularly on the value and impact of new technologies on individuals and organizations. He has published in such journals as Information Systems Research, MIS Quarterly, and Production and Operations Management. Before joining Purdue, he served as a Postdoctoral Associate at the MIT Sloan Initiative on the Digital Economy.

Cesar Martinelli

Cesar Martinelli ([email protected]) is a Professor of Economics at George Mason University and a member of the Interdisciplinary Center for Economic Science (ICES). He obtained his Ph.D. at UCLA. He has a with wide interests in economic theory, game theory, political economy, and experimental economics. Dr. Martinelli has published extensively in economics journals including The Review of Economic Studies, The Economic Journal, The Journal of Economy Literature, and other top journals in the field. He has also contributed chapters to The Handbook of Experimental Game Theory, A Monetary and Fiscal History of Latin America: 1960–2017, and other collected volumes. He is a Fellow of the Econometric Society and an Economic Theory Fellow. Currently he serves as an Advisory Editor for Games and Economic Behavior; previously he served as an editor for Social Choice and Welfare. Before joining ICES, he was a Professor of Economics and Dean of Social Sciences at ITAM in Mexico.